Remaking the Food System

Originally published in Stanford Social Innovation Review

By Don Shaffer

The food system, and how to fix it or rebuild it, was a hot topic at the recent Social Capital Markets (SOCAP) conference—for good reason. Many of us in the social enterprise sector—investors, entrepreneurs, philanthropists—see the need for an alternative food system that dramatically expands access to fresh food and supports sustainable local food production, and that ultimately helps create more resilient communities. For that to happen, we need to get outside our comfort zones and work together. Collaboration between philanthropists and investors in particular is essential to building an alternative food system.

That’s true both because the challenge is so formidable and because alternative food enterprises by their nature call for a fresh approach to funding. Remaking the food system requires remaking the supply chain, including production, processing, and distribution. Specifically, we need to provide small growers with access to affordable land closer to metropolitan areas; train more people to run farms effectively as businesses; build an infrastructure that enables farmers to sell more food directly and makes it easy for larger institutions to buy regionally produced food; and develop distribution channels that make fresh food a convenient, affordable option for everyone. And while our own expertise is in the United States, similar needs apply worldwide.

It helps that food is a hot investment area in Silicon Valley, especially on the distribution end, where scalable online distribution businesses are attracting substantial capital. But many of the enterprises needed to support an alternative food system simply don’t fit into the traditional venture capital model. They often have high upfront costs and relatively low profit margins—they don’t have hockey-stick growth prospects.

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Don Shaffer is President & CEO at RSF Social Finance